England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
IN BANKRUPTCY
(Mr Justice Neuberger)

		Royal Courts of Justice Strand London WC2 Thursday, 13th December 2001

1. LORD JUSTICE CHADWICK: On 16 November 2001 there was listed before me an application for permission to appeal against an order made on 8 May 2001 by Mr Justice Neuberger. That order was itself made on an appeal from an order made on 20 February 2001 by Mr Registrar James in bankruptcy proceedings. The application to this Court was made in an appellant's notice signed by the bankrupt, Mr Krishnan Kumar Arora, and his wife, Mrs Vijay Kumari Arora.
2. Mr Arora was adjudged bankrupt in April 1999. He is registered at the Land Registry as the owner of property known as 91 Portland Crescent, Greenford, Middlesex. The proceedings are brought by his trustee in bankruptcy for an order under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 and under section 335A of the Insolvency Act 1986.
3. Mrs Arora claimed a 50 per cent interest in the property, 91 Portland Crescent. There is no declaration of trust or other documentary material preceding the bankruptcy order in April 1999 to support that claim. There is no indication on the title registered at the Land Registry that the property is held upon a trust or is subject to any restraints against sale by the registered owner.
4. Mr Registrar James came to the conclusion that Mrs Arora's claim to a beneficial interest in the property had not been made out. He held, also, that in all the circumstances this was a case in which an order for sale should be made. He took into account not only the interests and needs of Mr Arora, but also those of his wife and children and, in relation to Mr Arora, what he described as his regrettable conduct in relation to the bankruptcy; in particular his refusal to answer questions even in public examination. He had regard to section 335A(3) of the Insolvency Act 1986, which requires that, where an application for sale is made more than one year after the date of the bankruptcy order (as was the position in this case), the interests of the creditors shall be treated as outweighing all other considerations, unless the circumstances of the case were exceptional. Mr Justice Neuberger upheld the Registrar's decision.
5. Some two and a half months after the judge's order of 8 May 2001 - and one month after the appellant's notice of 20 June seeking permission to appeal against the order had been filed - a civil proceedings order was made under section 42 of the Supreme Court Act 1981 in respect of Mr Arora. The effect of a civil proceedings order under that section is that no application (other than one for leave under the section) can be made by the person subject to that order in any civil proceedings without the leave of the High Court. So Mr Arora's application for permission to appeal against the order of 8 May 2001 could not proceed unless and until he had obtained the permission of a judge of the High Court under section 42 of the 1981 Act. No such leave has been obtained.
6. Accordingly, the only applicant who could proceed on 16 November 2001 was Mrs Arora. She did not attend and she was not represented. Nevertheless, in the circumstances which are set out in the judgment which I gave on that day, I took the view that I should deal in substance with the application which was listed for hearing; and that I should do so in open court. I took that view for the reason that, upon consideration of the papers, I was satisfied that the application was bound to fail; and so it was in the interests of saving expense, further delay and court time that I should deal with it on the material before me.
7. Put shortly, the application was for permission to appeal against an order of the High Court, itself made on an appeal from the Registrar. Section 55(1) of the Access to Justice Act 1999 and CPR 52.13 applied. Although the grounds of appeal made extensive and unparticularised allegations of miscarriage of justice, of fraud, deception and perjury on the part of the creditors, the trustees, their legal advisers and the judges, and allegations of institutional racism amongst the judiciary - all of which, if supportable, would undoubtedly require the intervention of this Court - there was no material to support those allegations. I took the view - and I remain of the view - that it is an abuse of the Court's process to make serious allegations of that nature which are unparticularised and in respect of which no attempt has been made to provide substantiation in fact. The abuse is compounded when, as in the present case, the effect - and, I think, the purpose - of the appellants' notice was to delay the date at which the bankrupt's creditors will be paid out of the proceeds of realisation of this property; as the Registrar intended they should be when he made the order of 20 February 2001.
8. Accordingly, on 16 November 2001 I made an order in these terms, so far as material:

"... this application be struck out without further notice on the ground that it is an abuse of the process of the court unless within 14 days of the date of this order (namely by 4.30pm on Friday 30 November 2001) the second respondent [that is Mrs Arora] has made an application to this court to show cause why her application should not be struck out."

9. That period was subsequently extended to 7 December 2001, on Mrs Arora's representation that she had not had time to prepare her application.
10. Her application to show cause is made by application notice dated 30 November 2001, supported by a witness statement signed by her on the same date. It is that application which is now before me. Mrs Arora has attended to pursue her application and has made oral representations.
11. She makes two points. The first is that the appeal before Mr Justice Neuberger on 8 May 2001 was heard in her absence and on insufficient notice. But it appears on the face of the order made on 8 May 2001 that Mr Arora appeared before Mr Justice Neuberger and made representations. He asked for an adjournment. The judge refused the adjournment on the grounds which he set out in his judgment. It is not clear from the judgment that any separate request for adjournment was made on behalf of Mrs Arora; but it is plain that the judge took the view that Mr Arora was speaking for both of them. That, as it seems to me, was a realistic view to take in the circumstances of this case.
12. The position, therefore, is that Mrs Arora now says that the judge ought to have adjourned the matter on 8 May 2001 so as to enable her to be present. First, it seems to me that, if an application for an adjournment on her behalf - as distinct from the application that was being made by Mr Arora for both of them - was sought, it should have been made to the judge, so that he could deal with it. Secondly, if Mrs Arora felt aggrieved by the judge proceeding to hear the matter in the presence of her husband but in her absence, then it was open to her to apply promptly to the judge to set aside his order on the grounds that it had been made in her absence. She did not take that course. Thirdly, if she had made that application, the judge would have had to consider whether the conclusion which he reached on an appeal from the Registrar would have been different, or might have been different, if Mrs Arora had been present. On that latter point, no material has been put forward by Mrs Arora, to this day, which suggests that the Registrar was wrong in reaching his conclusion that she had no beneficial interest in the property. In my view that first ground of complaint cannot be regarded as raising an important point of principle or practice, or as being a compelling reason which would require the Court of Appeal to entertain an appeal in this case. That is the test which has to be satisfied.
13. Her second point is that her application for permission to appeal should be adjourned until after her husband has sought, and obtained, leave under section 42 of the Supreme Court Act 1981 to make his own application for permission to appeal. His application for leave under section 42 appears to have been made on 9 November 2001 and received by the Court Service at or about that time. A note has been handed to me, with a Queen's Bench Division date-stamp of 13 November 2001 on its face, which reads:

"We have Mr Arora's application notice CO/1680/01. Will issue this as soon as Mr Arora has a date he is available for in the week of 19 November 2001."

14. What appears to have happened is that the Administrative Court or the Queen's Bench Division required Mr Arora to provide a date when he would be available for a hearing during the week beginning 19 November 2001 so that his application for permission to pursue the current application for permission to appeal could be considered. He did not provide such a date and it appears that the Administrative Court has regarded his application as spent. At the least, no order under section 42 of the 1981 Act giving him permission has been made; and there does not appear to be any prospect that such an order will be made on his current application.
15. The question whether Mrs Arora's application should await the result of some application by her husband under section 42 of the 1981 Act was considered by Lord Justice Judge at the beginning of October. He decided that her application should be dealt with without awaiting the result of any application by her husband. There seems to me no reason at all why her application should await the result of an application by her husband under section 42. Her application is based on her assertion that she has a beneficial interest in the house. That is a contention which has been rejected and which, as it seems to me, has nothing at all to do with the question whether or not the house should be sold against the opposition of her husband. That point is not a point of principle or practice of such importance as to require a second appeal; nor is it a compelling reason why an appeal should be entertained in this Court. For those reasons this application to show cause fails.
16. The application for permission to appeal is dismissed.
Order: application for permission to appeal dismissed.